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Aug 25, 2008 at 12:01 AMAug 25, 2008 at 7:36 PM

A decision by Changing World Technologies to seek stockholders to help pay to expand their business is revealing details about the company's only operational plant, the Renewable Environmental Solutions plant in Carthage.

A decision by Changing World Technologies to seek stockholders to help pay to expand their business is revealing details about the company's only operational plant, the Renewable Environmental Solutions plant in Carthage.

According to SEC rules, a company seeking to sell stock publicly must file several forms with the Securities and Exchange Commission and make public details about their business, their business plan and the risks and possible rewards of their business plan.

Changing World Technologies, currently operated by Brian Appel, CEO, filed the necessary paperwork to sell stock in its company Aug. 12.

Company spokeswoman Glenna Watkins said SEC rules prevent the company from issuing public comments in the days leading up to a public offering.

The S-1 filing, which is more than 150 pages long, shows that the company is seeking $100 million from the stock offering, but it did not reveal the number of shares it planned to sell or the initial offering price.

The RES plant in Carthage takes unusable turkey parts from the Butterball plant in Carthage, as well as other animal remains, and puts them through cooking process that converts them to a kind of diesel fuel that can be used in boilers.

In the past, RES representatives have declined to name who is buying the fuel, but the SEC filing shows that Schreiber Foods was the source of more than 78 percent of RES's revenue in 2007 and was the source of 100 percent of the company's revenue in the first three months of 2008.

The filing said Schreiber has extended its contract with RES through 2010 to provide boiler fuel for the company's Monett and Mount Vernon plants.

"Schreiber's boilers are expected to consume approximately 1.4 million gallons annually of our renewable diesel," the filing said. "Another customer has entered into a two-year agreement with us to purchase approximately two million gallons of renewable diesel."

According to the filing, some of the other benefits of the RES process, called the Thermal Conversion Process, or TCP include:

- Ability to convert wide variety of feedstock: "We believe that TCP's ability to convert a wide variety of feedstock into renewable diesel provides us with a competitive advantage in acquiring the feedstock for our process. TCP can process a wide variety of waste streams simultaneously.

As a result, we can adjust our sourcing efforts for feedstock as market prices for these feedstock change. We believe this flexibility is a critical advantage as it affords us an increased ability to manage our costs."

- Energy efficient process: "TCP achieves high product yield and recovery of the energy contained in the feedstock, while consuming little energy in the process. Energy requirements are minimal due to the moderate processing temperatures and pressures used, the short amount of time required for the process and the recovery and reuse of waste heat."

- Environmentally friendly product: "Our products are renewable and are considered "carbon-neutral" as they are created from animal and food processing waste and do not result in the release of additional fossil carbon into the environment. By converting the wastes rather than sending them to a landfill, TCP eliminates the potential for pathogens and harmful chemicals to leach into the ground water."

On the risk side, the Changing World Technologies filing said: "We have encountered shortcomings in the design and engineering of our Carthage facility which have hindered our ability to effectively operate the Carthage facility, and we may encounter similar difficulties with our future facilities."

The filing said the Carthage plant has not operated more than 80 percent of the available time for any fiscal quarter until now because of mechanical difficulties. In fact, so far in 2008, the plant has operated for 77 percent of the planned operating hours of the plant.

"We have experienced periods where our Carthage facility was not operational, which required us to pay to divert or dispose of feedstock that we received but were unable to store or process," the filing said. "If our facility becomes non-operational in the future, we may face additional diversion and disposal costs related to the disposal of excess feedstock that we may be contracted to purchase but cannot store or process. We have also incurred costs in connection with the disposal of waste water at our Carthage facility."

The filing also addresses the legal action taken against RES related to odor problems in Carthage. It describes how the Missouri attorney general filed suit against the company on Jan. 11, 2006 seeking injunctions and civil fines for violating Missouri's odor standards.

It said the company agreed to pay $100,000 of a $175,000 fine and the state suspended $75,000. The company agreed to pay another $25,000 of the suspended portion of the fine after it received another odor violation in November 2006.

"Since Nov. 15, 2006, we have not received any notices of violation of the Missouri odor standards, and the two-year suspended penalty period under the settlement agreement has now ended," the filing said.

The filing also mentioned a lawsuit by a Carthage resident that could become a class action suit and the efforts to identify the source of odors coming from the Carthage Bottoms area. It mentions the meeting scheduled for today to discuss those efforts.

To see Changing World Technology's S-1 filing on the Web, go to http://www.sec.gov/Archives/edgar/data/1387371/000095012308009384/y65007sv1.htm

Carthage Press

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